THE TRUTH ABOUT Economics A CRITICAL THINKING GUIDE FOR Students, Parents, Teachers and Citizens MICHAEL RYAN Columbus, Ohio The Truth about Economics: A critical thinking guide for Students, Parents, Teachers and Citizens Published by Gatekeeper Press 3971 Hoover Rd Suite 77 Columbus, OH 43123-2839 www.GatekeeperPress.com Copyright © 2017 by Michael Ryan All rights reserved Neither this book, nor any parts within it may be sold or reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems without permission in writing from the author The only exception is by a reviewer, who may quote short excerpts in a review ISBN: 9781619848337 eISBN: 9781619848320 Printed in the United States of America Praise for The Truth about Economics "High school students who read this book will face a dilemma On one side they will find it hard afterward to navigate the confusions of textbook economics, and they may incur the impatience, even the wrath, of their teachers On the other, they will have read a small jewel of clear thinking And that could serve them well, later in life May they choose wisely.” James K Galbraith, Lloyd Bentsen Jr Chair in Government and Professor of Government at The University of Texas at Austin “Students expect course material presented by a professor to be truthful and honest This book demonstrates that supply and demand curves are completely unfounded, and instead promotes investigation, logic, truth, and the mental practice of questioning political doctrine, all of which are vital for the development of our education systems and society as a whole Nolan Glubke, St Edwards University" Student "A novel approach to economics; it takes it out of the classroom into the boardroom It challenges traditional thinking on the subject and converts the principles of economics into a useful and practical financial planning guide for one’s individual needs through life.” Joseph Frisz, retired executive This book is dedicated to the industrious students, young or old, who want to know how economic systems truly work This book is dedicated to the parents who want their children to learn how to prosper in our demanding and fast changing economic community This book is dedicated to those who will join the effort to change our educational system to ensure our children are taught relevant and meaningful economic concepts commonly referred to as financial literacy CONTENTS Introduction How This Book Came About Future Generations Will Pay the Price Highlights by Chapter Chapter Obtaining Knowledge Chapter Supply Curve Chapter The Demand Curve Chapter Market Pricing Chapter Economic Card Tricks Chapter Economic Smokescreens Chapter Replacing Supply and Demand Curves Chapter Groupthink Chapter Better Lessons Learned Chapter 10 Improved Vision Epilog Acknowledgements Bibliography INTRODUCTION How This Book Came About EVER IN MY life did I expect to write a book My initial career path had nothing to with writing books Instead, my early career was analytical, finding ways to use technology to solve business problems My formal training included engineering and finance, with degrees from Texas A&M University and University of California Berkeley This formal training enabled me to conceptualize and build bridges between technology and economics, making businesses more profitable It was a rewarding career that allowed me to retire early and pursue avenues to give back to the community One such avenue was teaching high school as a second career Most classes I taught were related to mathematics, except for one random assignment to teach an economics class Once I stumbled across the pervasive faulty logic that serves as the foundation of economics as taught today, I had to expose it As a teacher, I have always needed to explore the material at an exhaustive level in order to properly convey my understanding to a classroom of students with varying degrees of interest and capabilities One explanation might work for one group of students, while a second might be required for a different group of students This approach was fostered by my engineering training and is rooted in my innate curiosity about how things work In the past, my curiosity has driven me to take things apart that probably should have stayed together The carburetor in my 69 Chevy is a great example of something better left alone I approached the curriculum as I had approached the carburetor The curriculum was disassembled and explored far beyond the intentions of the original manufacturer To help with the exploration, I joined the online AP Economics Teacher Community as a source for further clarification Soon, I found economic laws that conflicted with basic rational thought My engineering mind just kept asking questions, digging deeper and deeper My technology training demanded the resolution of why, why, why? The explanations from the AP community resources were fraught with circular logic At one point, I was told I didn’t understand the math “Them’s fighting words” Any selfrespecting engineer would not take such a comment lying down The result is this book, which provides a complete exposure of how and why the theories involving supply and demand curves, originally conceived long ago, are incorrect and inadequate for explaining anything related to modern economics At best, the theories are academic wall paper, created years ago as universities sparred for the Crown of Economics within Academia The theories are now faded and torn, irrelevant, and mysteriously kept in place for some obscure purpose This book takes a structured rational approach to explaining the errors of old economic theories and their irrelevance to the economy of today Readers with the patience and willingness to think critically will be greatly rewarded They will learn why the old theories should be discarded They will learn that there are several types of markets, including product markets, labor markets, and security markets They will learn the six factors that affect the market for products, and the subsequent price one must pay Later books in the series will delve into factors affecting labor and security markets Some of the concepts covered may be unfamiliar to many people However, everyone can N benefit from reading this book The difference between financial literacy and the out of date economics curriculum is something everyone should understand Anyone who is taking an economics class, or has a student or friend in an economics class, will discover a treasure of discussions this book creates, revealing financial literacy as the knowledge they need During my research, I was often told that economists not use supply and demand curves in real life When asked why the topics are still taught, the answer was that students would encounter the material and needed to be familiar with the concepts The problem with this approach is that the students are never told that supply and demand curves fail to reflect reality Instead, they are left with the impression that supply and demand curves represent the founding principles of economic science A relevant quote: “This is what economics now does, it tells the young and susceptible (and also the old and vulnerable) that economic life has no content of power or politics because the firm is safely subordinate to the market and the state, and for this reason it is safely at the command of the consumer and citizen Such an economics is not neutral It is the influential and invaluable ally of those whose exercise of power depends upon an acquiescent public.” John Kenneth Galbraith (1973) People often say the system is rigged Few understand that it starts with our own educational system, shaped and crafted by academia to develop an acquiescent public Paul Samuelson is beyond any doubt the leading crusader in promoting the ideology to the American public “I don’t care who writes a nation’s laws, or crafts its advanced treaties, if I can write its economics textbooks.” Paul Samuelson—Nobel Prize Winner Economics 1970 Future Generations Will Pay the Price For the most part, we fail to educate our children about the basics of managing their finances We fail to teach our children how to prosper There are several states that have attempted to define a curriculum for financial literacy Only four, Utah, Tennessee, Missouri and Virginia, have added financial literacy as a requirement for graduation from high school This situation needs to change The value to students of understanding credit, investing, leverage, risk, retirement planning/Social Security, and the other many topics presented in a financial literacy class far out-weighs any value associated with old economic theories based upon unproven and unseen curves Economics today teaches students what to think Financial literacy teaches students how to think We need to stop teaching hollow and out dated economic theories that leave students misinformed and unprepared Highlights by Chapter Chapter 1: How We Gather Knowledge—A review of how society, through science, promotes a concept from idea to knowledge, plus some common pitfalls along the way Included is a warning about how certain pitfalls can be used to confuse and mislead, hiding true knowledge and leading to ideology Chapters and 3: Supply Curve and Demand Curve—A discussion of logical flaws found in the economic laws of supply and demand Chapter 4: Market Pricing—An introduction to the six factors that affect the price consumers pay in a product market Chapter 5: Economic Card Tricks—Mathematical errors, better described as card tricks, used by economists to justify their theories Any theory that uses false mathematics as a justification is not scientific, but ideological Chapter 6: Economic Smokescreens—How economists purposely hide key concepts, such as profits, thus avoiding any questions about an equitable society Chapter 7: Replacing Supply and Demand—With some help from early economists, a better way to view a market for products is revealed Chapter 8: Groupthink—How the psychology of groups prevented academia from applying the basic concepts of science to economics Old theories were rationalized into mythical proportions, freezing any new thought Chapter 9: Lessons Better Learned—Financial literacy embodies the knowledge and skills our children must have in order to prosper in our economic world This chapter reviews those skills, and demonstrates how state governments thwart our children’s access to this vital knowledge Chapter 10: Improved Vision—Some examples of how financial literacy leads to a better understanding of economics awareness of human condition The owner of a share of McDonalds is detached from the personal plight of the workers across America The stockholder only sees a financial asset that is performing its duty of generating profits, the more the better Thus, a second observation regarding the nature of all modern economic systems is uncovered: #2: The anonymous relationship between owner and laborer in the corporate environment obscures the condition of the labor class from the ownership class From Pope Francis: “The principal ethical dilemma of this capitalism is the creation of discarded people, then trying to hide them, or make sure they are no longer seen,” the Pope continued “A serious form of poverty in a civilization is when it is no longer able to see its poor, who are first discarded and then hidden.”.119 Someone trying to live on a minimum wage of $7.25 has roughly $15,000 a year to spend, assuming 40-hour work weeks This is near the poverty line, which qualifies the employee for government subsidies in the form of Earned Income Tax Credits, and probably other programs such as discounted healthcare It makes more sense that the employee’s firm should pay a livable wage and not require assistance from the government to feed and clothe its employees The government assistance is effectively a subsidy to the various industries that fail to pay a livable wage “The two biggest welfare queens in America today are Wal-Mart and McDonald’s.”120 A solution that restores human dignity is a higher minimum wage Arguments against the minimum wage can be partially addressed by employing a tiered minimum wage based upon characteristics such as age, family status or location A livable wage in New York City is significantly different from a livable wage in small town USA A working parent paid less than a livable wage will not have the money or time to properly raise their family A student living at home could make ends meet with a smaller livable wage Profits at All Costs Another characteristic from the firm’s ecosystem to consider is what different pressures are experienced by the different classes of worker The ownership/executive class works under tremendous pressure to perform, much like the pressures faced by an Olympic athlete: “Long hours, crushing workloads, multiple and constant pressures, and incessant conflict and unpopularity often come with the job.”121 To thrive, executives and owners must be competitive, hard-working, and relentless They deserve tremendous credit for being able to guide a corporation the same way a skilled horseman rides a horse They are surrounded by other executives with the same pressures They are all paid to make tough decisions, such as moving production to China in order to cut costs This provides a third observation for the modern economic system: #3: Corporate leadership is rewarded for growing profits at all costs As noted by Milton Friedman: “ there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”122 The difficulty with the third observation are the two words all cost When it comes to environmental costs, these are typically imposed upon other citizens who must live with the pollution or clean up the pollution Corporations will avoid the cost of preventing pollution in order to grow profits Corporations will avoid labor costs by moving production out of a country to grow profits The costs imposed upon the community due to lost jobs is not a concern for the corporation Milton Friedman was correct, corporations avoid any and all costs that they can, including avoiding a fair tax in order to expand profits Avoidance strategies are generally available to any lobbying organization in Washington that has the money required to influence legislation Blind pursuit of self-interest has costs that cannot be paid for by the invisible hand Unions as Taught in a US Economics Textbook Economic text books want workers to believe that unions are bad for other workers, and provide no benefit for workers in a union From Paul Samuelson’s 18th edition:123 If unions succeed in raising their wages their gains come at the expense of wages of nonunion workers We can see no appreciable impact on unionization on the share of wages in the United States Above equilibrium wages, whether caused by minimum wage laws or unions result(s) in a surplus of labor or unemployment.124 The ownership class wants people to believe false economic theory as it furthers their selfinterest by leaving more profits in their pockets and less savings for the working class Given there are no supply and demand curves, and no equilibrium wage, this theory can be discarded Conclusion With improved vision, citizens can ask their own questions and reach their own conclusions If people and corporations pursue their own self-interest, with the single responsibility to increase profits, with no consideration for fellow man or the environment, the outcome will be lower wages, government deficits, a degrading environment and income inequality Without society providing opposing forces to economic self-interest of powerful corporations, the living conditions for society will degrade There are no market solutions that curb self-interest Regulation is a fact of life for an equitable society, as regulations provide the balancing forces that curb the natural tendency for avarice found in all economic systems Epilog “ What lies behind the veil of economics? Vision and ideology.” —Robert Heilboner T of this book is to shine a bright light on our educational system and inform students, parents, teachers and citizens that there is a better choice for our children’s curriculum It will be very interesting to see how different people in society react to this suggestion What groups will support the change and what groups will resist? Which states will move the quickest to correct a glaring problem? Common sense suggests one legislative session is all that is required However, society is not ruled by common sense Giving our children and parents a choice is what matters most Being forced to take a class founded on the general premise of blind pursuit of self-interest seems counter to Christian or other religious thought Self-interest is defined as “consideration of advantages for yourself in making a decision, usually without worrying about its effect on others.” As an example, when purchasing a car, a price is agreed to, plus tax, title, and license The final paper work has sales tax and inventory tax It is to the dealer’s advantage to pass the inventory tax on to the buyer, even though the tax was levied on the dealership Is the dealer greedy, lying, cheating, stealing, or pursuing self-interest? Many uninformed consumers pay the tax without realizing they have over-paid At a minimum, students and parents should be allowed to substitute Financial Literacy in place of Economics as a graduation requirement HE PRIMARY POINT The State Determines your Knowledge In the state of Texas, the legislature determines what the schools will teach and what classes your student must take to receive a diploma These rules are explained in “The Texas Education Code.” In summary, a student must take economics, with an emphasis on the free enterprise system and its benefits For a parent who doesn’t know what is taught in the course, it is useful to examine either the TEKS from the Texas Education Agency or the AP College Board A visit to the AP College Board website reveals an ad for the class What makes this course interesting? Become familiar with the cost-benefit analysis that is the “economic way of thinking” Understand smaller segments of the economy, including consumers and producers, their interaction in output and resource markets, and the impact of government Learn to use graphs, charts, and data to analyze, describe, and explain economic concepts This all sounds great to a parent that hasn’t read this book or doesn’t have the time to assess the details Here is a quick comment on each of the three reasons promoting the course: Cost-Benefit—“Economic Way of Thinking” The course does not teach cost benefit, but instead, teaches opportunity costs Chapter explained how opportunity cost hides profits If a student truly adopts the “economic way of thinking”, they will never find a job, as no business in the real world uses opportunity cost to determine profits There is a reason why the Economics Department is not part of the business school The impact of government is predominantly described as a negative factor for the economy The books portray regulation as bad: a “ government rules to control the price, sale, or production decisions of a firm.”125 This sounds more like what happens in a centrally planned communist economy No effort is made to provide a full description of the types of regulation that markets need to operate in a fair and safe manner Consider the west Texas farmers near midland Texas that are paying over $8000 a month for electricity This is not due to a “market failure” but due to regulation failure The high rates are due to monopoly control of transmission lines Common sense regulation must exist in certain markets The book fails to explain other regulations such as margin requirements when trading stock or regulations that specify loan qualifications There is no mention of the moral hazard faced by banks lending debt to unqualified borrowers and then selling the debt on Wall Street as AAA rated investment Moral hazard is briefly mentioned by Mankiw: “The moral hazard problem is the temptation of imperfectly monitored workers to shirk their responsibilities.”126 Government regulations are required to curb financial failures due to moral hazard Learn to use graphs and charts Chapter provided a vivid description showing that economists have no idea how to use graphs charts and data, unless they are trying to deceive someone Anyone trained in these methods becomes ignorant about how to properly use mathematical analysis Further reading of the Texas education code brings one to section 26, which defines the rights of parents in determining what their students must study Bottom line, a parent can object to a portion of a class, but cannot prevent their child from taking an entire semester class Imagine a graduation requirement that states the student must learn how to break a horse If the state decides everyone must know how to break a horse, then so be it There is little to no option for a parent/student to avoid the instruction In Texas, until the State changes the education code, students and parents have no choice to avoid the economics class if they want to receive a diploma This is probably true for most other states The three bodies likely to influence graduation requirements include the state legislature, the state board of education and the education agency Taking Steps In September 2017, I met with my state legislator, the state board of education, and a nonprofit organization, Jumpstart The message delivered was the same for all three groups Our school system can improve tremendously with one simple change Problem Statement— High school students are often disengaged in the education process by the junior or senior year, due to lack of relevance in the curriculum The high school economics class teaches outdated and irrelevant concepts that are not used to support any standard business practice The economics class is required for graduation, perhaps for traditional reasons The economics class requires a full semester Adding another course as a graduation requirement would be difficult to accommodate, given the existing requirements The problems can be addressed by teaching a more relevant course, Financial Literacy, instead of Economics Relevancy is improved without adding pressure on students and schools to support an additional graduation requirement In addition to changing the graduation requirements, all state universities should no longer accept College Board test scores for AP Economics classes The material is out of date and will not improve the performance of students going to our Universities AP economics teaches false mathematical concepts, lowering our children’s ability to properly analyze various business situations Benefits/Justification: Students learn material that is extremely relevant Ask any student or parent to pick between Economics and Financial Literacy and they will select Financial Literacy every time The only reason they not make that choice today, is the graduation requirement and the lure of AP credit The risks of repetition of the 2008 financial collapse are related to a consumer’s lack of understanding of high risk mortgages Educating the public reduces the risk of financial failure for the entire country Students learn about starting their own small business This represents an opportunity to boost our economy Students learn about the different ways to save for the future, increasing the health of our financial system A bill for Financial Literacy is a bill for the economy and the people of Texas Support the Change A website, www.thetruthabouteconomics.com, will host supporting form letters that can be used to petition change from the various institutions involved Sample letters will be found for the following organizations: State Legislator—form letter that follows the “Message for Legislator” noted above University President—form letter asking your Alma Mater to stop accepting AP test credit on any economics class Local School District—A form letter to petition the replacement of economics with financial literacy Each state is different It may be possible for one to accomplish the goal without legislation The availability of the class will vary by state Some states require financial literacy to be taught upon request, even though it is not a graduation requirement Other documents and notices that support the goal will be on the site as well Perhaps the most important thing I learned is it doesn’t matter how we arrived at this predicament It could be the liberals, the conservatives, the Republicans, the Democrats, the Academics or Wall Street, who really knows? It doesn’t really matter What matters is we make a change I hope this book gives you the knowledge and motivation to help your kids and our future citizens learn what they need to know about economics A final quote from Robert Heilbroner: “What lies behind the veil of economics? Our deep-lying, perhaps unanalyzable notions concerning human nature, history, and the like, and the various disguises by which we come to terms, especially in capitalist society, with the primary but hidden sources of social orchestration—domination and acquiescence on the one hand, affect and sociality on the other.”127 Acknowledgements F I MUST thank my wife, who patiently listened over and over and over as the thoughts for this book coalesced into a meaningful stream of words It seemed I was a kid, with a new package of Play-Doh, and all I could was talk about the great animal shapes forming in the other room Thanks Sandy Next to thank is my circle of poker and golfing buddies They were the early volunteers that read the first versions of the manuscript Randy, Tom, Steve, Don and Joe provided excellent feedback, constantly encouraging me to keep it simple Special thanks to Joe, who provided notes, comments, and excellent discussion along with good wine My fellow teacher, Angie, graciously took the time to read an early version of the manuscript Her encouragement and feedback was a fresh tail wind as I wrapped up the final edits I was fortunate to have two of my students willing to take an early plunge Jennifer and Nolan accepted the task and gave the book an early read Their enthusiasm for the truth was fuel for my fire I hope all future students find the merit and energy experienced by Nolan and Jennifer There were several professional economists that were kind enough to read a random email from me, and reply to an odd question here and there They probably were not aware that their brief reply was like a stroke of a paddle moving me down river The following provided motivation with the smallest bit of encouragement: Alain Samson from London School of Economics, Luigi Pasinetti from University Cattolica, Brian Martin from U.O.W Australia, Jim Stanford from McMaster University, Philip Mirowski from University Notre Dame, Rod Hill from University New Brunswick, Jim Nolt from NYU, and John Pullen from UNE Australia Extensive encouragement was provided by James Galbraith from University of Texas James wisely identified the most important facets of this story, our students, their education, and our future Most importantly, given my lack of appreciation for well placed commas, or any comma for that matter, I could not have made it without my editor, Petrena Wilbur She demonstrated the patience of a great teacher, wading through the various drafts, calmly fixing commas and removing my frequent tendency to shout out my raw emotions on this topic Thanks Petrena!!! IRST Bibliography Chapter 1: Joseph A Schumpeter, “Science and Ideology”, The American Economic Review, March 1949 Chapter Gregory Mankiw, Principles of Economics, 6th edition, South-Western Cengage Learning, 2012 Joseph A Schumpeter, History of Economic Analysis, Routledge, 1954 Piero Sraffa, “The Laws of Returns under Competitive Conditions” The Economic Journal, Blackwell, December 1926 Jacob Viner, “Cost Curves and Supply Curves”, American Economic Association— Reading in Price Theory, Allen and Unwin, 1953 Allyn A Young, “Increasing Returns and Economic Progress”, The Economic Journal, December, 1928 Thomas Cate Editor, An Encyclopedia of Keynesian Economics, 2nd Edition, Edward Elgar, 2013 Steven Keen, Debunking Economics, Zed Books, 2011 Chapter 3 10 An interview with Robert Coase, 9/17/97 https://www.coase.org/coaseinterview.htm George Stigler, Theory of Price, Macmillan, 1966 Philip Kotler, Principles of Marketing, Prentice Hall 2013 Peter Fader, “Marketing vs Economics: Gymnastics or High-Wire Act?”, Forbes June 15th 2012 Henry Schultz, “The Chicago Tradition in Economics Volume 5”, Routledge 2002, David Teira Serrano, “A Positivist Tradition in Early Demand Theory”, http://www2.uned.es/personal/dteira/docs/positivisttradition.pdf E J Working, “What statistical demand curves show?”, Quarterly Journal of Economics, Oxford University Press, February 1927 volume 41 issue Henry Schultz, “The Chicago Tradition in Economics Volume 5”, Routledge 2002 H L Moore, “Economic Cycles: Their Law and Cause”, Macmillan, 1914 Michael Lewis, The Undoing Project, 2017, W W Norton Company Chapter Robert L Heilbroner, The Worldly Philosophers, 7th edition, Simon and Shuster, 1995 Adam Smith, Wealth of Nations, Metilibri, digital edition, 2007 Milton Friedman, “The Social Responsibility of Business is to Increase its Profits”, New York Times Magazine, September 13, 1970 Chapter Erving Goffman, Frame Analysis, Northeastern University Press, 1986 https://masscommtheory.com/theory-overviews/framing-theory/ Paul Samuelson, Economics An Introductory Analysis, McGraw Hill, 1958 Jon R Miller—On –line course material University of Idaho, Econ 272 Foundations of Economic Analysis http://www.webpages.uidaho.edu/econ272/online_ text/master_all_4th_ed.pdf Francis Bacon, Novum Organum, 1620, XLV Chapter Benjamin Franklin, “Advice to a Young Tradesman”, 1748 C Wright Mills, The Sociological Imagination, Oxford University Press, 2000, page 34 Chapter https://www.consumer.ftc.gov/articles/0176-buyers-remorse-when-ftcs-coolingrule-may-help Chapter Irving L Janis, Groupthink, Houghton Mifflin, 1982 Daniel B Klein and Charlotta Stern—“Groupthink in Academia, Majoritarian Department Politics and the Professional Pyramid”, The Independent Review V13 Spring 2009 http://www.econ.cam.ac.uk/about/history/ J M Keynes, “Alfred Marshall 1842-1924”, The Economic Journal, September 1924 Henry George, Progress and Poverty, Robert Schalkenbach Foundation, 2009 Alfred Marshall, Principals of Economics, Macmillan, 1920 J B Clark, “The Distribution of Wealth: A Theory of Wages, Interest and Profits”, online library of liberty John Pullen, The marginal productive theory of distribution, A critical history, Routledge, 2010 Milton Friedman, “Essays in Positive Economics”, Phoenix Books, 1966 10 Karl R Popper, “Conjectures and Refutations: The Growth of Scientific Knowledge”, Basic Books, 1962 11 Philip Mirowski, Machine Dreams, Cambridge University Press, 2002 12 Samuelson Nordhaus, Economics 18th Edition, McGraw Hill, 2005 13 Tyler Cowen, Alex Tabarrok, Modern Principles of Economics, Worth Publishers, 2013 14 David Seddon, Andre Gunder Frank, Obituary, The Independent, May 2005 15 Philip Tetlock, “Thinking the unthinkable: Sacred Values and Taboo Cognitions”, Trends in Cognitive Science, Vol number 7, July 2003 16 Frederic Lee, “A history of heterodox economics, challenging the mainstream in the twentieth century”, Routledge 2009 17 Catherine Lawson, “The Textbook Controversy: Lessons for Contemporary Economics”, AAUP Journal of Academic Freedom, 2015 Volume 18 G C Harcourt, Obituary: Professor Lorie Tarshis, The Independent, 10/8/1993 19 Lorie Tarshis, The Elements of Economics, Houghton Mifflin Co 1947 20 Stanley Wong, “Foundations of Paul Samuelson’s revealed preference theory” Routledge 2006 21 Stanley Wong, “The F-twist and the methodology of Paul Samuelson” The American Economic Review, June 1973 22 Rod Hill, Tom Myatt, “Dealing with dissent in the classroom” June 21, 2016 http://www.economics-antitextbook.com/ 23 Robert Thaler, Nudge Improving Decisions About Health, Wealth and Happiness, Penguin Books, 2008 Chapter https://www.flsenate.gov/session/bill/2017/00955 Adolfo Guzman Lopez, Despite New Law, California lags in personal finance / / http://www.scpr.org/news/2016/05/06/60317/despite-new-law-californialags-in-personal-financ/ Survey of the States, Economic and Personal Finance Education in or Nation’s Schools 2016, Council for Economic Education http://www.prescottschools.com/phs/wp-content/ uploads/sites/22/2017/01/course-descriptions2017-18.pdf http://leginfo.legislature.ca.gov/faces/billText Client.xhtml?bill_id=201720180SB583 Lawrence C Soley, Leasing the Ivory Tower, South End Press, 1995 page 128 Lewis Spellman, “The Spellman Report, For the Millennials, The Social Security Chickens have Come Home to Roost”, http://thespellmanreport.com/2016/12/09/millennials-social-security-chickenscome-home-roost/ https://www.ssa.gov/history/InternetMyths2.html Chapter 10 George R Catlett and Norman O Olson, In Pursuit of Professional Goals, Arthur Anderson and Co Chicago, 1973, page 172, Testimony of George Catlett and Norman O Olson at public hearing http://www.mymoneyblog.com/mcdonalds-franchise-cost-vs-profit.html The Seattle Minimum Wage Team, Report on the impact of Seattle’s Minimum Wage, July 2016 University of Washington Tim Worstall, “Milton Friedman Told us the Answer Decades Ago,” Comments Forbes, June 4, 2017 Pope Leo XIII, Rerum Novarum, 1891 Pope Paul VI, “Economy of Communion”, Vatican, 2/4/17 Barry Ritholtz, “How McDonalds and Walmart became Welfare Queens” Forbes 11/13/2013 Carl Bueke PhD, “How Executives Survive”, Pscycholoty Today, 2/27/12 Milton Friedman, “Capitalism and Freedom”, University of Chicago press, 1982 Epilog Robert Heilbroner, Behind the Veil of Economics, Penguin Books, 1988 Joseph A Schumpeter, “Science and Ideology”, The American Economic Review, March 1949, pg 358 Joseph Schumpeter, “Science and Ideology”, The American Economic Review, March 1949 page 346 Gregory Mankiw, Principles of Economics,6th edition, South-Western Cengage Learning, 2008, page 23 Joseph A Schumpeter, History of Economic Analysis, Routledge, 1954 Page 15 Ibid page 15 Piero Sraffa, “The Laws of Returns under Competitive Conditions”, The Economic Journal, Blackwell, December 1926, pp 535550 Joseph A Schumpeter, History of Economic Analysis, Routledge, 1954, page 41 Ibid page 1012 Jacob Viner, “Cost curves and supply curves”, American Economic Association—Readings in Price Theory, Allen and Unwin, 1953, pp 198-232 10 Allyn A Young, “Increasing Returns and Economic Progress” , The Economic Journal, December 1928 page 533 11 Thomas Cate Editor, An Encyclopedia of Keynesian Economics, 2nd Edition, Edward Elgar, 2013, page 668 12 Steve Keen, Debunking Economics, Zed Books, 2011 page 170 13 An interview with Robert Coase 9.17.1997 https://www.coase.org/coaseinterview.htm 14 George Stigler, “Theory of Price”, Macmillan, 1966, page 24 15 Gregory Mankiw, Principles of Economics, 6th edition, Cengage Learning, 2012, page 68 16 Philip Kotler, Principles of Marketing Prentice Hall 17 Peter Fader, Marketing vs Economics: Gymnastics or High-Wire Act?, Forbes June 15th 2012 18 Henry Schultz, “The Chicago Tradition in Economics Volume 5” Published by Routledge 2002 Edited by Ross Emmett Page 125 19 David Teira Serrano, A Positivist Tradition in Early Demand Theory http://www2.uned.es/personal/dteira/docs/positivisttradition.pdf 20 E J Working, “What statistical demand curves show?”, Quarterly Journal of Economics Oxford University Press February 1927 volume 41 issue pages 212-235 21 Ibid Henry Schultz, Chicago Tradition page 129 22 H L Moore, Economic Cycles, Macmillan, 1914, pg 64 23 Michael Lewis, The Undoing Project, 2017, W W Norton Company, page 378 24 Steven Keen, Debunking Economics, Zed Books, 2011, page xv 25 Robert L Heilbroner, “The Worldly Philosophers—The Lives, Times and Ideas of the Great Economic Thinkers” 7th edition, Simon and Schuster 1995, pg 15 26 Adam Smith, Wealth of Nations, Metilibri, digital edition, 2007 page 592 27 Ibid page 349 28 Robert L Heilbroner, Ibid page 36 29 ibid 30 Milton Friedman, The Social Responsibility of Business is to Increase its Profits, New York Times Magazine, September 13, 1970 31 “Wealth of Nations” page 550 32 Erving Goffman, Fame Analysis, Northeastern University Press, 1986 While Goffman initiated the ideas around framing theory, the quote above came from https://masscommtheory.com/theory-overviews/framing-theory/ 33 Gregory Mankiw, Principles of Economics 6th edition published 2012 by South-Western, Cengage Learning page 271 34 Paul Samuelson, Economics: An Introductory Analysis (New York, McGraw-Hill Book Company, 1958) page 461 35 On Line Course Material University of Idaho, Econ272 Foundations of Economic Analysis Text:—Jon R Miller— http://www.webpages.uidaho.edu/econ272/online_text/master_all_4th_ed.pdf 36 Gregory Mankiw, Economics 6th Edition, Southwestern-Cengage, Pg 267 Figure 37 Gregory Mankiw, Economics, Sixth Edition, South-Western Cengage Learning,20123 page 263 38 Ibid Page 378 39 Gregory Mankiw, Economics sixth edition, page 380, McGraw Hill, 2012 40 Gregory Mankiw, Economics sixth edition, page 282, McGraw Hill, 2012 41 Francis Bacon, Novum Organum, 1620, XLV 42 Paul Samuelson, Economics, First Edition, McGraw Hill, 1948 page 45 43 Gregory Mankiw, Principles of Economics Sixth Edition, 2012, South-Western Cengage Learning, Page 25 44 Benjamin Franklin, Advice to a Young Tradesman, 1748 45 Mankiw, Glossary page 836 46 Ibid page 262 47 Ibid page 261 48 Gregory Mankiw, Principles of Economics Sixth Edition, Cengage Learning, 2012 page 261 49 Ibid page 262 50 C Wright Mills, The Sociological Imagination, Oxford University Press, 2000, page 34 51 Gregory Mankiw, Principles of Economics sixth edition page 541 52 HL Moore, Economic Cycles, Their Law and Cause, New York, The Macmillan Company, 1914, page 114 53 E J Working, What Do Statistical Demand Curve Show? Readings in Price Theory, page 105, The American Economic Association Series, Ruskin House, 1953 54 Gregory Mankiw, page 74 55 https://www.consumer.ftc.gov/articles/0176-buyers-remorse-when-ftcs-cooling-rule-may-help 56 Irving L Janis, Groupthink, Houghton Mifflin, 1982, page 57 Daniel B Klein and Charlotta Stern—Groupthink in Academia, Majoritarian Department Politics and the Professional Pyramid The Independent Review V 13 Spring 2009, page 12 58 http://www.econ.cam.ac.uk/about/history/ 59 J M Keynes, Alfred Marshall 1842-1924, The Economic Journal, September 1924 page 344 60 Ibid page 350 61 Ibid page 349 62 Daniel B Klein and Charlotta Stern Groupthink in Academia 63 J M Keynes, Alfred Marshall—page 366 64 Henry George, Progress and Poverty, 2009 Robert Schalkenbach Foundation page 187 65 Alfred Marshall, Principles of Economics, 8th edition, Macmillan and Co Limited, 1920, page 214 66 J B Clark, The Distribution of Wealth: A Theory of Wages, Interest and Profits, Online Library of Liberty, Page 249 67 John Pullen, The Marginal Productive Theory of Distribution, A Critical History, London:Routledge, 2010 68 H L Moore, Economic Cycles, Their Law and Cause, page 113, Macmillon Company 1914 69 E J Working, “What Statistical Demand Curves Show?” The Quarterly Journal of Economics 1927 70 Milton Friedman, Essays in Positive Economics, Phoenix Books, 1966, page 14 71 Karl R Popper, Conjectures and Refutations: The Growth of Scientific Knowledge, Basic Books, New York, London 1962 page 37 72 Philip Mirowski, Machine Dreams, Cambridge University Press, 2002 Page 95 73 Gregory Mankiw, Principles of Economics, South-wester Cengage Learning, sixth edition page 261 74 Samuelson Nordhaus, Economics, McGraw Hill 18th edition, page 136 75 Tyler Cowen, Alex Tabarrok, Modern Principles of Economics, Worth Publishers 2013 page 402 76 Samuelson Nordhaus page 134 77 Ibid, page 138 78 David Seddon, Andre Gunder Frank, Obituary, The Independent http://www.independent.co.uk/news/obituaries/andregunder-frank-490030.html 79 Philip Tetlock, Thinking the unthinkable: sacred values and taboo cognitions, Trends in Cognitive Science, Vol7 no July 2003 80 Daniel B Klein, Charlotta Stern, Group Think in Academia, Majoritarian Department Politics and the Professional Pyramid, The Independent Review V 13, Spring 2009 81 Ibid 82 Steen Keen, Debunking Economics, Zed Books, 2011, page 100 83 Frederic Lee, A history of Heterodox Economics, Challenging the Mainstream in the Twentieth Century, Routlege, 2009 84 Catherine Lawson, The “Textbook Controversy”: Lessons for Contemporary Economics, AAUP Journal of Academic Freedom, Volume 2015 85 G C Harcourt, Obituary: Professor Lorie Tarshis 10/8/1993 (http://www.independent.co.uk/news/people/obituary-professorlorie-tarshis-1509652.html 86 Paul Samuelson, Economics, first edition page 190, McGraw Hill, 1948 87 Ibid page 193 88 Lorie Tarshis, The Elements of Economics, Houghton Mifflin Co, 1947, page 655 89 Stanley Wong, “Foundations of Paul Samuelson’s Revealed Preference Theory”, Routledge, 2006, page 78 90 Stanley Wong, “The F-Twist and the methodology of Paul Samuelson”, The American Economic Review, publisher American Economic Association, June 1973 PP 312-325 91 Stanley Wong, “Foundations of Paul Samuelson’s “Page xvii 92 Ibid page xviii 93 Ibid page xi 94 Ibid xxi 95 J M Keynes, Alfred Marshall 1824-1924, page 326 96 Ibid page 345 97 Stanley Wong, “Foundations of Paul Samuelson’s xix 98 Rod Hill, Tom Myatt, Dealing with Dissent in the Classroom, June 21 2016, http://www.economics-antitextbook.com/ 99 George Stigler, A Sketch of the History of Truth in Teaching, Journal of Political Economy, Vol 81, No 2, Mar-Apr 1973 pp 491-495 100 Richard H Thaler and Cass R Sunstein, Nudge Improving Decisions About Health, Wealth and Happines, Penguin Books, 2009 101 https://www.flsenate.gov/Session/Bill/2017/00955 102 Adolfo Guzman Lopez Despite New Law, California lags in personal finance 5/6/2016 http://www.scpr.org/news/2016/05/06/60317/despite-new-law-california-lags-in-personal-financ/ 103 Survey of the States, Economic and Personal Finance Education in or Nation’s Schools 2016, Council for Economic Education 104 http://www.prescottschools.com/phs/wp-content/uploads/sites/22/2017/01/course-descriptions-2017-18.pdf 105 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB583 106 Ibid Adolfo Guzman-Lopez 107 Lawrence C Soley, Leasing the Ivory Tower, South End Press, 1995 page 128 108 Lewsi Spellman, The Spellman Report, For the Millennials, The Social Security Chickens Have Come Home to Roost, 109 https://www.ssa.gov/history/InternetMyths2.html 110 George R Catlett and Norman O Olson, In Pursuit of Professional Goals, Arthur Anderson and Co Chicago, 1973, page 172, Testimony of George Catlett and Norman O Olson at public hearing 111 Gregory Mankiw, Economics, page 118 112 http://www.mymoneyblog.com/mcdonalds-franchise-cost-vs-profit.html 113 The Seattle Minimum Wage Team, Report on the impact of Seattle’s Minimum Wage, July 2016 University of Washington 114 Tim Worstall, Milton Friedman Told us the Answer Decades Ago, Comments Forbes, June 4, 2017 115 Adam Smith, Wealth of Nations, Metalibri Digital edition, 2007 Page 671 116 Ibid page 42 117 Pope Leo XIII, Rerum Novarum, 1891 118 Ibid 119 Pope Paul VI, Economy of Communion, Vatican, 2/4/17 120 Barry Ritholtz, “How McDonalds and Walmart became Welfare Queens” Forbs 11/13/2013 121 Carl Bueke PhD,” How Executives Survive”, Psychology Today, 2/27/12 122 Milton Friedman, Capitalism and Freedom, University of Chicago press, 1982 page 112 123 Paul Samuelson, Economics, 18th edition, McGraw Hill, 2005 page 256 124 Gregory Mankiw, Principles of Economics, 6th edition, South-Western Cengage Learning, 2012, page 405 125 Paul Samuelson, Economics, McGraw Hill, 2005, page 342 126 Gregory Mankiw, Principles of Economics, Sixth Edition, South-Western Cengage, 2012, Page 468 127 Robert Heilbroner, Behind the Veil of Economics, Penguin Books, 1988 page 185 .. .THE TRUTH ABOUT Economics A CRITICAL THINKING GUIDE FOR Students, Parents, Teachers and Citizens MICHAEL RYAN Columbus, Ohio The Truth about Economics: A critical thinking guide for Students,. .. Furthermore, Marshall adds the curved line and presents the data as a mathematical function with all the properties attributed to a true mathematical function This is mathematical and scientific... phenomena Formulation of a hypothesis to explain the phenomena In physics, the hypothesis often takes the form of a causal mechanism or a mathematical relation Use of the hypothesis to predict the